Trade Shocks, Growth and Resilience : Eastern Europe’s Adjustment Tale

EU11 economies are among the most open economies globally. The process of trade integration and the creation of GVCs also drove a significant inflow of FDI into these countries. While integration into the EU and FDI have enhanced their growth potential, these developments have also made them more vulnerabilities to external shocks. During the Great Recession, these countries have experienced major volatility with long lasting social and political impact. Looking forward, domestic and EU-level reforms should focus on mitigating these vulnerabilities by increasing economic and social resilience